HHLA container throughput rises by 4.4 percent to 7.5 million in 2013
Hamburger Hafen und Logistik AG (HHLA) again expanded its position in a difficult market environment in the 2013 financial year, the company said in its press release. Container throughput grew by 4.4 percent to 7.5 million standard containers (TEU). This corresponded to a market share of 20.4 percent in the North Range. Container transport by rail rose again significantly. The companies in the realigned Intermodal segment increased their transport volumes by 18.0 percent to 1.2 million TEU. Group revenue went up to € 1,155.2 million. The operating result (EBIT) came in at € 158.0 million and thus met the forecast range. In the 2014 financial year, HHLA expects Group revenue to rise slightly and the operating result (EBIT) to be in the range € 138 million to € 158 million.
“We saw considerable increases in throughput and transportation in 2013. Our market share gains underline that we were well prepared for the challenges of a difficult market environment. HHLA also continues to have a high level of earnings. This increases our entrepreneurial scope,” stated the Chairman of HHLA’s Executive Board, Klaus-Dieter Peters, when presenting the annual financial results for 2013. “In view of the delay in dredging the river Elbe, the rising number of ever-larger vessels is leading to extraordinary challenges. To improve our efficiency in the handling of large vessels, we have proactively created capacity and productivity reserves, particularly at our Container Terminal Burchardkai, from which we will benefit as utilisation continues to increase. Our realigned Intermodal segment once again performed particularly well, with a volume increase of 18.0 percent. We will keep pursuing our successful intermodal strategy in 2014. We have an excellent liquidity position and a sound balance sheet structure. Against this background, we propose to pay a dividend of € 0.45 for the listed Class A shares, i.e. a payout ratio of 65 percent of the distributable net profit.”
Revenue and Earnings Development
In the 2013 financial year, HHLA’s revenue rose by 2.4 percent to € 1,155.2 million, largely matching volume trends following adjustment for non-recurring effects (including the realignment of the Intermodal segment). The operating result (EBIT) developed as forecast coming in at € 158.0 million. As a result of non-recurring effects, this figure is only to a limited extent comparable with the previous year’s amount. The 2012 operating result includes a one-off gain of € 17.6 million, largely attributable to the sale of HHLA’s stake in TFG-Transfracht. Other key factors for EBIT development in the 2013 financial year were:
Additional and follow-up costs resulting from the flooding of the rivers Elbe and Danube along some of the rail companies’ key routes,
The restructuring of the Polzug Group,
Increased expenditure due to the delay in dredging the river Elbe,
Unrealised productivity potential at the Container Terminal Burchardkai due to current capacity utilisation levels.
„Revenue in the listed Port Logistics subgroup went up by 2.4 percent to € 1,127.2 million. The subgroup’s operating result (EBIT) decreased by 16.5 percent to € 144.3 million.
Proposed Dividend Payment of € 0.45 per Class A share
At the Annual General Meeting on 19 June 2014, the HHLA Executive and Supervisory Boards will propose a dividend of € 0.45 per Class A share for the financial year 2013 for the listed shares in the Port Logistics subgroup. 97.6 percent of HHLA’s revenue is attributable to this subgroup. This corresponds to a dividend payout ratio of 65.3 percent of the net profit for the year after minority interests. At 11.6 percent (previous year: 13.6 percent), the return on capital employed (ROCE) was above the assumption for long-term cost of capital of 10.5 percent.
2014 Business Forecast: Slight Revenue Growth and Operating Result on a Par with the Previous Year Targeted in a Persistently Difficult Market Environment
Current forecasts by leading institutes concerning economic growth, container throughput and container transport suggest a restrained general trend for volumes in our competitive environment. HHLA intends to strengthen its position in the handling of mega-ships and expects container handling volumes to increase slightly – assuming that the current structure of freight flows remains intact. In the current 2014 financial year, the market positions of HHLA’s Intermodal companies should be consolidated and the hinterland network expanded further. Transport volumes are expected to rise moderately as a result. Based on these developments in volume, Group revenue is also forecast to increase slightly year-on-year.
At the same time, the market environment remains difficult – not least due to current infrastructure deficits relating to the Port of Hamburg’s seaward accessibility. Furthermore, consolidation processes in the liner shipping industry will lead to increasingly volatile volumes. The situation is made more complicated by the uncertainty surrounding events in Ukraine and potential negative impacts on trade with Russia. In view of this, achieving a result in the 2014 financial year that is on a par with that of the previous year remains an ambitious target.
Container Terminals Well Equipped for Future Challenges
The rising number of ever-larger vessels poses challenges to container terminals around the world. From 2012 to 2013 alone, the number of calls of vessels with a carrying capacity of over 10,000 TEU at HHLA’s Hamburg terminals rose by 29 percent to 291. As the river Elbe still has not been dredged, the time windows available for ships of this size are getting smaller. The frequent restrictions to pass the Kiel canal made matters worse. HHLA’s container terminals improved their capabilities in the 2013 financial year with a range of measures aimed at coping with the rising number of very large vessels calling at the facilities to the satisfaction of the customers. The focus here was on the HHLA Container Terminal Burchardkai. As the five additional state-of-the-art tandem gantry cranes delivered in 2013 gradually enter service during 2014, the terminal will have mega-ship berths which can handle even the latest generation of vessels with a carrying capacity of 18,000 TEU.
It is all the more impressive that HHLA’s Hamburg terminals were able to increase their market share in the North Range to 20.4 percent considering the intensive competitive environment. This gain resulted primarily from growth of 8.3 percent in feeder traffic via the Baltic Sea to neighbouring Central and Eastern European countries and a 6.3 percent rise in Far East traffic.
Further Expansion of the Hinterland Network
The realigned transport companies achieved a significant increase in transport volumes of 18.0 percent to 1.2 million TEU in the 2013 financial year. This rise was mainly attributable to new Metrans connections in Germany and with Austria and Switzerland. These new connections constitute part of HHLA’s D.A.CH. strategy (abbreviation for Germany, Austria and Switzerland). The hub terminal in the Czech city of Ceska Trebova, which went into service in May 2013, also made a key contribution here. The restructuring of the rail company Polzug and new connections to Poland’s seaports helped to expand the market position as well. HHLA has aligned its entire transport network with the requirements of maritime logistics. HHLA’s customers have access to a top-quality, highly reliable logistics chain between the European hinterland and seaport terminals. HHLA is thereby increasingly using its own production resources, such as modern inland terminals, container-carrying wagons and locomotives, as well as its own equipment for container transport by road. In 2014, HHLA will continue to invest in the quality and expansion of its hinterland network.
HHLA Is Committed to Sustainability
A key target as part of HHLA’s sustainability strategy is to reduce specific CO2 emissions per container handled and transported by at least 30 percent between 2008 and 2020. In the 2013 financial year, specific CO2 emissions were already 24.9 percent lower than in 2008 A wide range of individual measures helped achieve this result. For instance, the Container Terminal Altenwerder put four additional zero-emission battery electric automated guided vehicles (AGVs) into service in 2013. The decision was taken to expand this fleet of all-electric AGVs further. Furthermore, HHLA will already use 51 electric driven passenger cars at the beginning of April 2014.
Since 2012, HHLA has applied the Global Reporting Initiative (GRI) guidelines on sustainability reporting, the most commonly used standard of its kind in the world. Furthermore, HHLA was the first maritime company to issue a declaration of compliance with the German Sustainability Code (GSC).
Development of Key Group Figures at a Glance
Revenue rose by 2.4 percent to € 1,155.2 million.
The operating result (EBIT) declined by 15.0 percent to € 158.0 million.
Profit after tax was 28.0 percent below that of the previous year at € 80.4 million.
Profit after tax and minority interests was down 24.9 percent at € 54.3 million.
Cash flow from operating activities decreased by 10.7 percent to € 188.1 million.
The equity ratio climbed from 31.9 percent to 34.7 percent.
Earnings per share amounted to € 0.69 for the listed Port Logistics subgroup in 2013, a year-on-year decline of 27.3 percent.
A proposal to distribute a dividend of € 0.45 per listed Class A share will be made at the Annual General Meeting. This corresponds to a dividend payout ratio of 65.3 percent.
The listed Port Logistics subgroup, in which HHLA’s core business is pooled, reported revenue of € 1,127.2 million in 2013 (+ 2.4 percent) and EBIT of € 144.3 million (- 16.5 percent). This meant that the Port Logistics subgroup generated 97.6 percent of Group revenue and 91.4 percent of Group EBIT.
